Topic 2 Innovation


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Topic 2 Innovation

  1. 1. Product Innovation Topic 2
  2. 2. <ul><li>Innovation and the continuous development of new and improved products are key to the design process. This topic considers the relationship between the design cycle and the product cycle. It moves on to explore the role of invention in innovation and the impact of market pull and technology push on product innovation. Establishing and developing markets for products are a critical element of the product cycle. </li></ul>
  3. 3. Designers and the Product Cycle 2.1
  4. 4. The Product Cycle <ul><li>Inception and design </li></ul><ul><li>Production </li></ul><ul><li>Sales </li></ul><ul><li>Use </li></ul><ul><li>Retirement </li></ul><ul><li>The designer has impact (but is not necessarily in control) at each level </li></ul>
  5. 5. Stages of the product cycle <ul><li>There are three basic stages of use for a product </li></ul><ul><li>In the early stages of the product cycle, many changes to the product take place until it develops to the </li></ul><ul><li>mature stage, where it is diffused into the market, gains acceptance and sells well. </li></ul><ul><li>In the late stage, the product begins to decline in need and therefore in sales </li></ul>
  6. 6. Can you Identify Products in each Stage? <ul><li>Carbon Nanotubes are in early stage of development. </li></ul><ul><li>The ballpoint pen is in the mature stage, as it still sells well although the design does not change much. </li></ul><ul><li>The cassette tape is in the late stage, as it has been overtaken by successive generations of products. </li></ul>
  7. 7. Design versus product cycles <ul><li>the design process is aimed at producing a suitable solution to a problem, </li></ul><ul><li>the product cycle is concerned with putting that solution into commercial practice </li></ul>
  8. 8. For many products the product cycle has shortened <ul><li>Look at the differences between a laptop computer and a ballpoint pen. </li></ul><ul><li>Laptop computers are an intensely competitive market, with size and power being key issues </li></ul><ul><li>It is not unlikely to have a pen that is useable longer than a laptop. </li></ul>
  9. 9. Innovation and Invention 2.2
  10. 10. Invention and Innovation <ul><li>Invention - The process of discovering a principle. A technical advance in a particular field often resulting in a novel product. </li></ul><ul><li>Innovation -The business of putting an invention in the marketplace and making it a success. </li></ul>
  11. 11. Stages of innovation <ul><li>Developing an idea into a viable product </li></ul><ul><li>Production </li></ul><ul><li>marketing and sales </li></ul><ul><li>followed by redesign </li></ul><ul><li>the cycle or spiral continues </li></ul>
  12. 12. Science and Technology <ul><li>Science explains how the world is </li></ul><ul><li>Technology uncovers new possibilities for materials, manufacturing techniques and processes. </li></ul><ul><li>Often technology is an application of science in a way that is not yet fully understood </li></ul>
  13. 13. Most inventions fail to become innovations <ul><li>Marketability </li></ul><ul><li>financial support </li></ul><ul><li>Marketing </li></ul><ul><li>the need for the invention </li></ul><ul><li>Price </li></ul><ul><li>Consumer or Business resistance to change </li></ul><ul><li>aversion to risk </li></ul>
  14. 14. Design and Innovation. <ul><li>For continued innovations (re-innovation), products and processes are constantly updated (redesigned) to make them more commercially viable and to give consumers choice and improved products. </li></ul>
  15. 15. Definitions <ul><li>dominant design - The design containing those implicit features of a product which are recognized as essential by a majority of manufacturers and purchasers. </li></ul><ul><li>diffusion into the marketplace - The wide acceptance (and sales) of a product. </li></ul><ul><li>market pull - The initial impetus for the development of a new product is generated by a demand from the market. </li></ul><ul><li>technology push - T he impetus for a new design emanates from a technological development. </li></ul>
  16. 16. Dominant Designs <ul><li>ballpoint pen (Bic ®) </li></ul><ul><li>Apple® iPod® </li></ul><ul><li>Coca-Cola®. </li></ul>
  17. 17. The difficulties of getting a product to diffuse into the marketplace. <ul><li>Competition </li></ul><ul><li>Local </li></ul><ul><li>National </li></ul><ul><li>Global </li></ul><ul><li>The problems of getting novel products to market include product launches and marketing </li></ul>
  18. 18. market pull or technology push <ul><li>Push and pull are present in most successful innovations. </li></ul><ul><li>The explanation should apply only to the origin of the idea or where the idea seems to have been generated. </li></ul>
  19. 19. The Lone Inventor <ul><li>lone inventor – An individual working outside or inside an organization who is committed to the invention of a novel product and often becomes isolated because s/he is engrossed with ideas which imply change and are resisted by others. </li></ul><ul><li>it is becoming increasingly difficult to be a successful lone inventor </li></ul><ul><li>Most products are now quite complex and rely on expertise from various disciplines. </li></ul><ul><li>Most designs are developed by multidisciplinary teams </li></ul><ul><li>The amount of investment required is often too much for one individual. </li></ul>
  20. 20. The Lone Inventor <ul><li>They are often used to setting their own targets rather than working as members of teams. </li></ul><ul><li>They can be dogmatic in their methodology and less flexible than team workers. </li></ul><ul><li>The lone inventor may lack the business acumen to push the invention through to innovation </li></ul>
  21. 21. Product Champions <ul><li>product champion - An influential individual, usually working within an organization, who develops an enthusiasm for a particular idea or invention and “champions” it within the organization. </li></ul><ul><li>The product champion is often a forceful personality with much influence in a company. He/she is more astute at being able to push the idea through the various business channels and is often able to consider the merits of the invention more objectively. </li></ul>
  22. 22. Money <ul><li>Innovators may have difficulty in obtaining financial support for an invention. </li></ul><ul><li>Most people with money to invest will be inclined to wait until it is clearer whether an invention is going to be successful before investing: the problem is to get them to take the risk. </li></ul>
  23. 23. People and Markets 2.3
  24. 24. Definitions <ul><li>technophile - Someone who immediately welcomes a technological change. </li></ul><ul><li>techno-cautious - Someone who needs some convincing before embracing technological change. </li></ul><ul><li>technophobe - Someone who resists all technological change. </li></ul>
  25. 25. Reactions <ul><li>People's reactions to technological change vary depending on their values and personal circumstances. </li></ul><ul><li>First-order effects and second-order effects should be taken into account, for example, personal gain in owning a car versus social and environmental considerations </li></ul>
  26. 26. Corporate Strategy <ul><li>corporate strategy - Long-term aims and objectives of a company and ways of achieving them by allocation of resources </li></ul><ul><li>Two types: </li></ul><ul><li>Pioneering (next Slide) </li></ul><ul><li>Imitative </li></ul>
  27. 27. Pioneering Strategy <ul><li>Pioneering means being ahead of the competitors by introducing a new product first. </li></ul><ul><li>It is the most risky (costly) strategy but one with the potential for the largest gains </li></ul><ul><li>A pioneering company requires a strong research and development (R&D) capability, which is expensive. A pioneering company needs to be financially secure and requires product champions to push new ideas. </li></ul><ul><li>Consider the Sony or Apple companies and their various pioneering developments. </li></ul><ul><li>Good market research can offset some risk, but is problematic for novel products </li></ul>
  28. 28. Imitative Strategy <ul><li>The imitative strategy aims to develop a product similar to the &quot;pioneered&quot; product as quickly as possible </li></ul><ul><li>It takes advantage of R&D invested by others </li></ul><ul><li>Is less risky </li></ul><ul><li>based on a strong development capability </li></ul><ul><li>It is often best to use a combination of strategies </li></ul>
  29. 29. Strategies for Innovation . <ul><li>market penetration - Increasing sales to existing customers or finding new customers for an existing product. (usually through advertising) </li></ul><ul><li>market development - Finding new applications for existing products thereby opening up new markets. (Nylon was originally developed for parachutes) </li></ul>
  30. 30. More Strategies for Innovation <ul><li>product development - The creation of new, modified or updated products aimed mainly at a company’s existing customers. (replacing mechanical with microelectronic controls in domestic products) </li></ul><ul><li>Diversification - Involves a company in both the development of new products and in selling those products to new companies. (different types or colors of electrical plugs) </li></ul>
  31. 31. Market Sector and Market Segmentation <ul><li>Market Sector - A broad way of categorizing the kinds of market the company is aiming for. </li></ul><ul><li>Market Segmentation - Markets divide up into smaller segments where the purchasers have similar characteristics and tastes. </li></ul>
  32. 32. Markets may be segmented in many ways <ul><li>Income </li></ul><ul><li>age group </li></ul><ul><li>lifestyle </li></ul><ul><li>geographical location </li></ul>
  33. 33. More Definitions <ul><li>Robust Design - Flexible designs which can be adapted to changing technical and market requirements. </li></ul><ul><li>Design Family - The evolution of a design into a variety of products that will appeal to a wide range of customers. </li></ul><ul><li>mobile phones or personal stereos are examples of a robust design that has become a design family </li></ul>
  34. 34. The End Product Innovation